Tehran's top nuclear negotiator, Ali Larijani, nevertheless pledged on Friday that Iran would continue to cooperate with the International Atomic Energy Agency (IAEA).
Larijani said the criticism of Iran in the report was "neither legal nor technical" - repeating Iran's argument that as a signatory to the nuclear Non-Proliferation Treaty (NPT) it has the "right" to carry out fuel cycle work for peaceful purposes.
"We don't think this political part is important. We will continue our cooperation with the agency (IAEA) so that the small questions that are unresolved will be resolved," Larijani told state television.
"Things are on the right track," he added.
Larijani's comments came as IAEA chief Muhammad ElBaradei released his latest report on Iran's compliance with his agency, which said Iran had failed to suspend nuclear fuel work and that its full cooperation in clearing up questions about its nuclear programme was "overdue".
Since the IAEA "is not yet in a position to clarify some important outstanding issues after two and a half years of intensive inspections and investigation, Iran's full transparency is indispensable and overdue", the IAEA said.
Washington and other western government accuse Tehran of seeking to develop nuclear weapons under the cover of an atomic energy drive, a charge it denies. The IAEA has been investigating the accusation since February 2003.
The crisis worsened last month when Iran resumed uranium conversion work in protest over demands from Britain, France and Germany that it abandon the fuel cycle in exchange for incentives.
Deadline not met
The IAEA's 35-nation board of governors called on 11 August for Iran to return to a full suspension and also charged ElBaradei with reporting to it by 3 September.
Friday's report stated Iran has failed to suspend nuclear fuel work, with US and European leaders saying this could trigger UN Security Council action.
The IAEA report said that as of last Tuesday approximately 4000kg of uranium ore had been fed into a uranium conversion facility in Isfahan.
"The objective guarantees that other countries need for Iran's peaceful nuclear activities will be realised as well Iran's nuclear technology"
Iran's nuclear negotiator
ElBaradei has said his agency has so far confirmed Iranian declarations about its nuclear activities but that this does not mean there are not undeclared activities and that "the jury is still out" on whether Iran's programme is peaceful.
Larijani told state television the report "has positive points and negative points. The negative points are not technical, but are there for bargaining and are there due to pressure from the United States and other countries".
More time needed
Earlier on Friday, Larijani said Iran's new popularist government should be given time to resolve the stand-off.
"The new government in Iran must be given time to use all its capacity ... to create a reasonable way to resolving the nuclear issue," he was quoted as saying by the student news agency ISNA.
"I believe that public opinion in the world understands that the new government needs the appropriate time to (make) effective proposals," he said.
Larijani said the negotiations "must be balanced and the give and take must be clear to people", repeating Iran's assertion that it was being unfairly treated.
"It is not right that they raise their voices at Iran. They should consider Iran's power as an effective country in region," he added, advising France in particular "to act with discretion".
Iran's new hardline authorities have moved quickly to challenge the negotiations with the EU-3, and said this week Tehran does not consider Britain, France and Germany to be the sole negotiating partners.
Iran in particular wants to bring in the countries from the Non-Aligned Movement - such as South Africa and Malaysia - which have been more sympathetic to Iran's effort to possess nuclear-fuel facilities.
Iran's new President Mahmoud Ahmadinejad is also expected to come up with fresh proposals this month.
"In this proposal, the objective guarantees that other countries need for Iran's peaceful nuclear activities will be realised as well Iran's nuclear technology," Larijani said.